Why Contracts Need a Change Clause
Fixed-price contracts signed before December 11 can become unworkable if rules change. Building on the pricing, supplier terms, and co-manufacturing content discussed elsewhere in this publication, a regulatory-change clause says in advance what happens to price, volume, and obligations if the rules shift.
What the Clause Should Define
The trigger. Describe the event clearly, such as a change in federal or state law that affects the product's legality or required testing.
The response. Specify whether prices adjust, volumes can be reduced, or either party may pause or end the agreement.
The process. Set notice periods, how affected inventory is handled, and how disputes are resolved.
Keep It Fair
Clauses that favor only one side tend to be resisted. Mutual flexibility, such as shared adjustment mechanisms, is easier to agree on and more likely to hold.
Practical Tips
- Use objective, verifiable triggers rather than vague wording
- Address in-transit and finished inventory explicitly
- Have counsel review the final language
Use It With Existing Customers
Offer the clause as a way to protect both parties, and pair it with your customer communication so buyers see it as reassurance.
Low Gravity Hemp offers contracts with clear change provisions. Contact us to talk through yours.
